Ola Plans To Raise An Additional $300 Mn As Part Of Series J Round

Cab hailing giant Ola’s parent company, ANI Technologies, has proposed to increase its authorised capital to include an additional number of Series-J shares. This move indicates the company’s intentions to raise an additional $300 Mn (INR 2,089 Cr) as a part of its ongoing funding round.

The share capital hike comes in at a time when the cab-hailing company is in the process of raising about $1 Bn in equity financing. With this round, Ola’s valuation is expected to reach $6 Bn, ET reported.

According to the filings reviewed by paper.vc, Ola’s new investors such as Sachin Bansal, Hyundai, and Kia, who came on board in this ongoing funding round, will get 1.16 Mn Series J cumulative compulsorily convertible preference shares at a price of INR 21,250 per share.

Following the increase in authorised capital, Softbank’s stake in Ola is likely to drop to 23.3% from existing 26%. Meanwhile, the combined stakes of founders, Bhavish Aggarwal and Ankit Bhati, will grow to reach 10.8%.

Ola’s Plans To Onboard New Investors

Ola was founded by Bhavish Aggarwal and Ankit Bhati in 2011. The company has a presence in over 125 cities across India, Australia, New Zealand and the United Kingdom.

It counts Japan-based SoftBank as one of its major investors. However, both the companies are at odds after Ola began resisting the efforts by the Japanese conglomerate to increase its current stake.

In 2017, it also amended its Articles of Association to include a clause which prevents SoftBank from buying more shares in the company without approval from the founders and board.

Currently, Ola is looking to onboard new investors in order to reduce dependence on SoftBank. Sachin Bansal had led an investment of $92 Mn (INR 640 Cr) in the company as a part of its ongoing Series J funding round.

It had also raised $74 Mn (INR 515 Cr) from its existing investor Steadview Capital, through preference shares at a subscription price of $301 (INR 20,959) per preference share, according to a company filing accessed by Inc42.

In March, it had raised $300 Mn from South Korean automaker Hyundai along with its affiliate Kia Motors to fund a strategic partnership under which the three companies extensively collaborate on building India-specific electric vehicles and infrastructure.

Prior to that, Ola also set up its separate electric vehicle unit named Ola Electric Mobility which raised $56 Mn (INR 400 Cr) from Ola’s early investors, Tiger Global and Matrix India among others.

Ola’s Initiatives To Diversify Offerings

Ola is also looking to strengthen its footprint in the market by offering various services to its users. Most recently, it was reported that Ola plans to launch its own credit card, most likely in partnership with State Bank of India (SBI). The company will begin its pilot as soon as next week and plans to issue 1 Mn credit cards in the first year.

It is also planning to invest over $500 Mn (INR 3,448 Cr) to launch its own self-drive rental service. The self-drive services will be launched in seven cities by deploying over 10,000 vehicles including luxury sedans and SUVs under its ‘Ola Self-Drive’ Category in the coming weeks.

After gaining popularity in its home market, Ola is now also looking to strengthen its footprint in international markets. Recently, it launched its services in three new cities in UK, Liverpool, Birmingham, and Reading, after local councils granted the company licenses for both taxi and private hire cars.

In November 2018, Ola launched its services in New Zealand and has been offering rides to Auckland, Wellington and Christchurch. In February 2018, it had launched its services in Perth, Australia.